Markets Rise after Trump -China Truce
- Tharindu Ameresekere
- May 13
- 2 min read
US stocks skyrocketed Monday after a dramatic easing of trade tensions between the United States and China, following a weekend breakthrough in Geneva. Top trade officials, including Treasury Secretary Scott Bessent and US Trade Representative Jamieson Greer, negotiated a significant reduction in tariffs, marking a surprising and optimistic turn in the long-standing trade standoff.
The Dow Jones Industrial Average surged 1,161 points (2.81%), while the S&P 500 climbed 3.26%. The tech-heavy Nasdaq soared 4.35%, officially exiting its bear market by rising more than 20% from recent lows. This marked the biggest single-day gains for all three indexes in over a month.
Markets responded swiftly to the news that both nations agreed to slash tariffs by 115 percentage points, lowering the pressure on global trade and reducing recession risks. “No one had these low China tariff rates on their bingo cards,” said LPL Financial’s Jeff Buchbinder, emphasizing the unexpected nature of the agreement.
Tech stocks led the rally, with Apple, Tesla, Amazon, and Nvidia posting significant gains. Luxury brands and automakers also rebounded, reflecting investor confidence. Meanwhile, safe-haven assets like gold and US Treasuries fell, while oil prices and the US dollar rose.
Treasury Secretary Bessent stressed the importance of the deal, calling it a “pause” in the trade war rather than a full resolution. He noted that the US is now better positioned to decouple from China on strategic goods and enhance supply chain resilience.
While the de-escalation marks a major economic win, officials emphasized that it is only the beginning of a broader strategy to secure fairer and more sustainable trade practices. For now, though, Wall Street is celebrating what many are calling a “historic fresh start” in US-China relations.
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